Martin Endjala
The Communication Regulatory Authority of Namibia (CRAN) has won a constitutional challenge filed by Mobile Telecommunications Limited (MTC) against the amendment of Section 23 of the Communications Act, in the Supreme Court concerning the collection of levies.
After appealing the High Court judgment of 22 August 2022, the Supreme Court heard the appeal on the 14th of April 2023. The Supreme Court of Namibia delivered a judgment in CRAN’s favour on 13 March 2024.
MTC’s application was based on the grounds that Section 23 as amended, which allows CRAN to collect regulatory levies was unconstitutional as the amended section had no limit to the upper threshold of the regulatory levy.
Further arguing that it lacked executive oversight and failed to prescribe parameters leading to CRAN’s unchecked, uncircumscribed discretion without limitation.
On 22 August 2022, the High Court held that Section 23 of the Communications Act 8 of 2009 as amended and any regulations prescribed to that provision are declared unconstitutional and null and void.
This was announced by CRAN’s Chief Executive Officer, Emilia Nghikembua last week, who explained that no regulatory levies have been collected since 22 August 2022. This undermined CRAN’s viability as regulatory levies make up 80 percent of CRAN’s revenue.
“No regulatory levies have been collected since 22 August 2022. Considering the Supreme Court findings, the Authority will resume collecting levies backdating back to that period and moving forward. The Authority will also finally launch the Universal Service Fund, which was equally hampered by the legal challenge,” she said.
The implication of the judgment she said, is that the challenged Section 23 as amended is constitutional and will remain valid and enforceable.
Nghikembua stated that this is a landmark decision because CRAN can now focus on the rudimentary aspects of its mandate to ensure that all Namibians have access to affordable and good quality services.
Adding that its mandate was hugely undermined by the lack of sufficient resources to defray the cost of regulation, due to the uncertainty around the regulatory levies, being CRAN’s biggest source of revenue.
Following the judgment by the Supreme Court, it concluded that, in its view, the High Court in its consideration of the constitutionality vires of the amended Section 23 did not attach sufficient weight to the fact that the legislature added considerable detail to Section 23 which did not form part of the previous Section 23.
The Supreme Court held that with the amended Section 23, the legislature has succeeded in circumscribing and limiting CRAN’s discretionary power to set regulatory levies.
The legislative schemes under Section 23 as amended strike a balance between two competing interests, being the recognition of CRAN as the main dependent of the levy income for its activities and on the other hand sourcing funds for CRAN should not be at the expense of the operators.
The Court also found that the regulatory scheme adopted under the amended Section 23 allows for flexibility in the joints of CRAN accompanied by sufficient safeguards against either over-recovery or under-recovery and sets out justiciable criteria on which operations may challenge any unreasonable exercise of discretionary power.
The Supreme Court concluded that it is satisfied that, on its terms, Section 23 read with the relevant provisions of the Communications Act, passes the constitutionality muster, independent of the provisions of the Public Enterprises Governance Act.
